New VAT measures to bring in Tk 6,423cr
The government is set to rake in an additional Tk 6,423 crore next fiscal year due to various value added tax measures proposed in the budget.
The disclosure comes after tax officials last week presented a picture to Finance Minister AMA Muhith of how much revenue will be gained or lost owing to the various tax measures.
However, the proposed VAT waiver to some items would result in revenue loss of Tk 20 crore.
Muhith, who will present today an amended version of the budget he had proposed on June 2, is unlikely to make any changes to the tax measures save for the source tax on export earnings.
The source tax may be brought down to 0.8 percent or 1 percent from the proposed 1.5 percent, said a finance ministry official.
The revenue target for fiscal 2016-17 has been set at Tk 203,152 crore, up 35.43 percent from current year's target.
The target for income tax collection would be Tk 71,940 crore and VAT collection Tk 72,764 crore.
The targets have come under fire from economists, who termed them unachievable.
The finance minister, however, is determined to meet the target.
“The target is higher but you must achieve it,” he told officials of the National Board of Revenue in the meeting last week.
The package VAT in the proposed budget has been doubled in almost all cases, with the higher ceiling being Tk 28,000, up from the current Tk 14,000.
Businessmen have demanded lowering the ceiling but the NBR officials said it is unlikely to happen.
Only Tk 10 crore to Tk 12 crore is collected from package VAT, said NBR officials.
“The tax collection from this is not the main factor, but making the businessmen habituated to paying VAT before the VAT law comes into effect is the main reason,” said an official.
At present, the number of companies registered with the NBR is 140,000, of which only 40,000 pay VAT.
However, some small commodities that were brought under the VAT purview may be given a waiver.
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